Tuesday, February 24, 2009

Hard Rains, Weak Umbrellas

I have a queasy feeling after the NSOTU (not the state of the union speech, as folks on twitter call it).

Barack Obama is vastly more qualified than anyone I've seen on the political scene, and I know I'm not alone in saying that.

He's a strong liberal-- who opposed the Iraq War when it took courage to do so, who verifies conservative truths when appropriate. I shudder to think what we'd be going through if we had President Clinton or Pelosi, or god forbid, McCain or Huckabee.

But my sense is that we needed to have a recession in 2001 after the tech bubble-- the one that put me and so many other Silicon Valley workers out of a job.

I didn't think that then. After I drove home from work each night to news of yet another decrease in the interest rate by the Federal Reserve, I cheered-- I was that much less likely to be laid off by a company that was clearly headed out of business. Better to be laid off later than sooner: something would come up.

But now I see, or rather believe-- because who among us can know what is going on with certainty in the economy-- that by putting off a stronger recession than we experienced, we guaranteed that when it did come, it would just be stronger.

The low interest rates stimulated housing price rises, which gave people the opportunity to borrow off the increased value of their homes. Which kept the economy going. But I can't help believe that we all knew somehow in our guts that we were living on borrowed time.

Bullshit was all around us. An essay I read recently, I think by Paul Rogat Loeb, speaks of the tragedy of the lies that we expect
and thus no longer enrage us- the phony surveys by large corporations that are really sales pitches, the recording that plays while we are on hold that tells us we are valued, valued , valued, valued customers.

My sense is that any stimulus borrowing that does not build natural capital, or reduce it's reduction, will just lead to an economic collapse later that is all the more severe.

How bad can it get? When record drought is all around, when the ice caps melt, when forests die because of beetle infestations, when record heat waves lead to blackouts and nuclear plant shutdowns, when petroleum is more expensive, well.......

it could get worse than it is.

And right now, it's worse than it's been in a long time; and we're only a third or halfway through. And as the stress hit the economy, more stores, clubs, institutions may collapse, thus stress-testing nearby institutions and populations, which may then themselves collapse.

It could be a hard rain that falls.

1 comment:

TCB said...

For some reason I haven't checked your blog in a while...

I saw something that pissed me off on TV last night, about computerized lie detectors that could be hooked into sick call lines to analyze your voice and see if you are really sick when you call.


Notice if you will that they always make the working drones take drug tests and such. What about the executives? The ones who loot the treasury and poison the rivers? When do they ever have to prove they're telling the truth? They get away with it because we let them.

Incidentally, and more germane to your post, it's been suggested that Alan Greenspan manipulated interest rates o help Bush get elected in 2000 and reelected in 2004. This seems true to me; certainly, he said one thing about deficit spending under Clinton (No!) and something else entirely about deficit spending under W (Sure, why not?)